Digital Media

Last December, the music industry's message to song writers, publishers, and musicians was that antipiracy help was on the way. Hopes soared after the major labels announced that they had convinced a group of telecoms to work with them.

Filing lawsuits against individuals accused of illegal file sharing was, for the most part, a thing of the past, said the Recording Industry Association of America, the trade group representing the top music companies. The new strategy was to enlist Internet service providers, the gatekeepers of the Web, to issue a series of warnings meant to increase pressure on alleged pirates in what the RIAA called a "graduated response." Under the plan, those subscribers who refused to heed warnings could eventually see their Web connection suspended.

Six months later, the music industry is still waiting to hear from the RIAA which ISPs have explicitly agreed to work with the association. When the RIAA first announced its new antipiracy project, it didn't name partners. Behind the scenes, industry insiders assured the media that the group would disclose the names of partner ISPs "within weeks." Six months later, however, not one ISP has publicly acknowledged working with the RIAA on a "graduated response."

RIAA CEO Mitch Bainwol

(Credit: Declan McCullagh)

That there are still no announced deals--and there's no guarantee the RIAA can sign any of the major broadband companies--indicates that at best the big recording companies may have spoken too soon when they said broadband providers would help, says one ISP executive. Ironically, at a time when many figured the RIAA had finally hit upon a compelling way to go after music piracy, the association's copyright protection efforts may be more toothless than ever.

"(The RIAA) has tried various ways to turn ISPs and other intermediaries into their own Internet cops," said Cindy Cohn, legal director for the Electronic Frontier Foundation, an advocacy group for Internet users. "What the ISPs appear to be saying is that this isn't our job."

To be sure, the RIAA continues to pitch its plan to ISPs, numerous sources have told CNET News. AT&T has launched tests of a graduated response--everything, that is, but service interruption. The telecom said it would never shut off a customer's service without a court order. The recording companies may soon announce some kind of agreement with one of the ISP trade groups. But this won't bind the group's members and the RIAA will still need to strike deals with individual companies.

"We have been working slowly but surely, directly and through the offices of (New York Attorney General Andrew) Cuomo, with virtually every major ISP on common approaches," said Jonathan Lamy, an RIAA spokesman in an e-mail. "During the past six months, a number of different ISPs have forwarded nearly half a million RIAA notices to P2P infringers. They had not done that before last winter. A number of individual ISPs now argue that notices alone are proving to have a sufficient deterrent impact."

What the RIAA seems to be suggesting here is that it doesn't need a threat of service termination for a graduated response to be effective. This, however, conflicts with what music executives say in private. They want a carrot and stick approach. They know they have to offer the public inexpensive and easy-to-use alternatives to illegal peer-to-peer sites. They also believe chronic abusers won't stop without the threat of a serious punitive consequence.

So, why did the RIAA announce the ISP-based program without any ISPs on board so many months ago?

Some RIAA critics have speculated that the December announcement was a smokescreen to cover the music industry's retreat from the 5-year-old and highly controversial strategy of filing copyright lawsuits against individuals accused of copyright violations. The theory goes something like this: the RIAA needed a face-saving way to walk away from the litigation, which resulted in more than 30,000 people being sued, a fortune in legal fees, a huge public relations black eye, and didn't do all that much to stop piracy.

Ernesto, founder of the blog TorrentFreak, which focuses on file sharing, was always skeptical of the RIAA's announcement. He noted that some telecoms have voluntarily sent warning notices to subscribers accused of illegally downloading songs for years, while other companies refused. He says he sees nothing new.

"Yes, the RIAA, MPAA and other outfits do plan to send copyright infringement warnings to ISPs," Ernesto wrote in March, "but they've been doing so for at least half a decade. Every other month these Hollywood lobbyists pitch their antipiracy efforts to the public...this doesn't mean, however, that something is about to change."

According to the ISP executive who asked for anonymity because he's involved in negotiations with the music sector, the RIAA's tactics in dealing with the ISPs have been too heavy handed.

The executive complained that the RIAA has tried to use Andrew Cuomo to push the ISPs into helping. But Cuomo doesn't have the kind of political muscle to sway the major ISPs when they are acting well within the law, the executive said. There's nothing in the Digital Millennium Copyright Act that requires ISPs to send their own warning letters to subscribers.

And some ISPs say the DMCA is unclear about when they must terminate service of repeat offenders. AT&T executives say they won't cut off someone's Web access based solely on evidence supplied by the recording industry and will only do so after receiving a court order.

"We keeping hearing about how (Cuomo) is supposed to make this happen," said the executive. "You don't see much changing, do you?

So if Cuomo isn't enough, why don't the music labels appeal to Congress to legislate the ISPs into submission? That's easy. The ISPs have much more influence in Washington than the music sector. There's also little public sympathy for recording stars, who are often perceived to be rolling in money--even if this is a reality for a tiny fraction of working musicians.

In an interview with CNET last week, Paul McGuinness, manager of the rock band U2, says that ISPs have for a long time profited from selling broadband to file sharers and have little interest in taking action without seeing financial reward. But he sees some progress around the globe.

"Perhaps broadband subscription sales are saturated in many territories and the ISPs are belatedly but realistically now turning to building revenue collection businesses with the content owners," McGuinness said. "I just hope it's not too late."

Cohn, from EFF, sees it differently. To her, cutting off someone's Internet connection for file sharing is like refusing to sell shoes to someone accused of jaywalking.

"Every day that passes we realize how important Internet connectivity is to people's lives," Cohn said. "The RIAA looks so out of step with what most people think is a reasonable response to (copyright) infringing behavior. Even to the people that believe we're locked into this 19th century view of copyright law, the RIAA looks hysterical."

For years, digital technology and the Internet have provided a virtual buffet of digital content from which millions have feasted for free.

Whether it be downloading movies illegally found with the help of the Pirate Bay, ripping a movie rental from Netlix to a computer hard drive, republishing an unauthorized copy of a news photograph to the Web, or sharing music on peer-to-peer services, the people who create this content have begun to send a message: "no more free lunches."

Copyright owners around the globe have gone on the attack. They're backing antipiracy legislation in France and Sweden. They're lobbying Internet service providers in the United States to crack down on customers who download files illegally. They're pressuring hardware and software companies to prevent their products from being used as "pirate toolboxes." They're threatening legal action against Google and other sites that aggregate news without permission.

Perhaps the most dramatic example of the new resolve of copyright owners came on Friday, when a court in Sweden found the operators of the Pirate Bay, likely the best known hub for file sharing on the Web, guilty of violating copyright law. In a case that is sure to be appealed, the four men were sentenced to a year in jail and fined the equivalent of $3.6 million.

"There might be just a point here where the culture is changing on what's legitimate behavior online," said Mike McCurry, the former White House press secretary under President Bill Clinton and co-chairman of Arts+Labs, a collaborative group of technology and media companies. "I think perhaps something of a tipping point has been reached where people are finally saying that activity we thought was just okay or skirting around the edge has tipped over into something both dangerous, criminal, and unfair."

The outcome of all the antipiracy efforts may be that jobs are spared and investor value is preserved. It might also mean information and digital entertainment becomes more expensive and less accessible. What the content creators have yet to prove is whether these moves will make any difference. They have little to show for previous efforts.

"It's not that they might not obtain their short term aims," said Danny O'Brien, International outreach coordinator for the Electronic Frontier Foundation, a group that advocates for Internet users and technology companies. "But what is the long-term goal? What is the end game? You take out The Pirate Bay and people will still make copies of movies. People will continue to share music online...It's been five years since Grokster. How has that helped the music industry?"

The $3.6 million the Pirate Bay was fined is only a fraction of what copyright owners say they are losing each year as a result of copyright infringement.

(Credit: Mats Lewan/CNET)

O'Brien is referring to the U.S. Supreme Court decision that peer-to-peer file-sharing services Grokster and Streamcast could be sued for encouraging copyright infringement. The decision effectively forced Grokster out of business and set a legal precedent against peer-to-peer services. Yet, such services continue to operate and illegal file sharing, at least by most measures, has only grown.

Nonetheless, copyright owners aren't waving any white flags.

Layoffs, ISPs, and Kindle
There aren't supposed to be any free lunches, say executives from media and entertainment companies who spoke with CNET News. The tab for all that so-called free content is being picked up by stunt men, makeup artists, secretaries, sound engineers, editors, truck drivers, and lots of other people who work for media and entertainment companies, according to the executives. They maintain that at a time of massive corporate cutbacks and layoffs, media and entertainment firms have to cut a little deeper because of piracy.

So, the stakes are higher now for content creators. They say they will prevail for that reason and because they understand technology better, are marshaling more resources and enjoy more support among International lawmakers than ever before. The most recent endorsement came Friday, when British Prime Minister Gordon Brown told a gathering of techies in London that his government "will support the legal framework that enables the private sector to create content."

Copyright owners also point to other important, if hard-won, victories.

•  YouTube once swelled with pirated clips of movies, TV shows, and music videos. In the last year, however, the site has begun filtering out illegal content. The move came after media conglomerate Viacom filed a $1 billion copyright lawsuit and as YouTube began partnering with Hollywood in a bid to offer premium TV shows and films.

•  Amazon handed over control of the Kindle 2's text-to-speech application when the Authors Guild claimed the function violated copyright law and could cut into sales of audio books.

•  In cooperation with the film and music industries, AT&T has begun testing an escalating system of warnings or graduated response. The ISP says it would never terminate service without a court order. Apparently, not all ISPs are as squeamish (go here to see a copy of a warning letter from Charter Communications).

One important finding from AT&T's test is that the company said it sees a drop in illegal downloading from people who have received a warning. With more experience, copyright owners and ISPs will only get better at discouraging illegal file sharing, said Rick Cotton, NBC Universal's general counsel.

"What's important is all the creators of the broadband Internet be working together to reduce pirating activity," Cotton said. "What needs to be clear is that accessing copyright content illegally is simply not acceptable. We need strong messaging, in the form of technology barriers and speed bumps that make it difficult to access pirate sites. There does at some point need to be some consequence (in graduated response by ISPs). My expectation is that there will continue to be dialogue but ultimately the test is effectiveness."

The end of free?
As for the motivations of media and entertainment companies, there is perhaps one more reason for drawing a line in the sand against piracy now. So far, free hasn't turned out to be a very profitable business model.

The decimated newspaper industry, which has given away stories on the Web for years, is talking about charging for content--again. Digital music services that depended on advertising sales to support themselves, such as SpiralFrog and Ruckus have gone bust. Imeem, an online social network that focuses on music, has staggered recently and has asked financial backers for more support.

Even YouTube, with its 100 million users, has struggled to generate cash. Google CEO Eric Schmidt said last week that he expected the site to one day charge for some content. The statement is a startling revelation coming from the chief of the world's mightiest advertising company, and seems to underscore YouTube's struggles to squeeze profits out of ads alone.

This is not the first ad-market crunch the tech sector has seen. During the dot-com bust in the early part of this decade, ad-supported companies scrambled to charge for services that they once gave away free. Most of those companies disappeared.

Jonathan Zittrain, professor of Internet law at Harvard Law School and author of the book "The Future of the Internet and How to Stop It," says it's too early for free services to be written off.

"I wouldn't say (this is) the end of free yet," Zittrain said. "There is a vibrant set of activities to occupy people's leisure time that isn't fee-for-product. Whether blogging, video making, tweeting, or interacting on social networks, the number of things to do while staring at a screen that require no monetary investment at all has climbed significantly.

"In a down economy," Zittrain continued, "one might surf for an hour rather than spend $15 at a multiplex."

Author's note: I recently asked a public relations executive at a major entertainment conglomerate why, if piracy is hurting everyone, more celebrities aren't speaking out against it. "I've got two words for you," he said. "Lars Ulrich." Apparently comedian Jack Black was willing to risk condemnation from cyber-groovies. The video above is an antipiracy message he made two years ago.

Update: 11:37 a.m. PDT To include quotes from a Cox spokesman.

Update: 4:05 p.m. PDT To include Comcast's statement that the 2 million notices sent out was not part of any new policy.

The Internet service providers that have agreed to work with the recording industry to battle illegal file sharing are starting to come forward.

Joe Waz, a senior vice president at Comcast, the nation's second largest ISP, told a gathering of music industry executives that the company has issued 2 million notices on behalf of copyright owners, according to multiple people who were in attendance.

Comcast said Wednesday afternoon that the 2 million notices Waz referred to were part of the company's standard practice and not a new policy.

"Comcast, like other major ISPs, forwards notices of alleged infringement that we receive from music, movie, videogame, and other content owners to our customers," Comcast said in a statement. "This is the same process we've had in place for years--nothing has changed. While we have always supported copyright holders in their efforts to reduce piracy under the Digital Millennium Copyright Act (DMCA), and continue to do so, we have no plans to test a so-called 'three-strikes-and-you're-out' policy."

Comcast's Joe Waz, in a photo from March 2008.

(Credit: Declan McCullagh/CNET)

Waz made the comments Tuesday while part of a panel at the Leadership Music Digital Summit in Nashville. This was the same event where an AT&T executive told the gathering that the nation's largest ISP was cooperating with the Recording Industry Association of America by sending notices to customers accused of illegal filing sharing. The letters are part of a trial program, the executive told the audience.

In addition, sources confirmed that Cox Communications is also assisting the RIAA in the group's new campaign to use ISPs to help discourage consumers from pirating songs.

In December, the RIAA shocked music fans by announcing the termination of a years-long strategy of filing copyright lawsuits against individuals. Instead, the lobbying group for the major recording companies would seek the help of Internet providers. The RIAA said it had lined up a group of large ISPs to help, but declined to disclose which ones or how many.

To copyright owners, the shift in strategy is a victory. For a long time, people in the music and film industries have complained that broadband providers were profiting from piracy. Many in the entertainment industry have called on ISPs to lend a hand in plugging up the flow of illegal content.

To those who advocate for Internet users, however, any plan that threatens to shut off someone's Internet access without hard evidence is unfair. RIAA leaders have said that the group's graduated response program would include punitive action for repeat offenders, which could include suspension or even termination of service. RIAA managers say they support due process to protect people from being falsely accused. But what the due process looks like has yet to be determined.

Comcast was careful to state that it isn't considering terminating customers' service.

An AT&T spokeswoman said that the ISP has not threatened anyone with the disabling of service but acknowledged that warning letters sent to customers, the company says it reserves the right to terminate service.

She said the company sends a letter from the RIAA and adds its own cover letter. The company informs the customer that the problem could be that a teenager in the home has downloaded unauthorized material or that someone else is doing so via an unsecured Wi-Fi connection.

As far as Cox is concerned, the practices that the RIAA is asking ISPs to adopt have been standard since the Digital Millennium Copyright Act was passed in 1998. The company acknowledges that it will, in the case of chronic offenders, shut off service. A Cox spokesman said this about the company's policy:

When we receive notifications from RIAA or other copyright holders stating that their copyrighted material is being infringed by a customer, we pass that information along to the customer so they can correct the problem, or dispute the notice directly with the copyright holder if they feel the notice was sent in error. This notification is the most helpful thing we can do for the customer and is expected of us, as an ISP, under the DMCA. We attach a copy of the notice from the copyright holder with our message to the customer.

The spokesman said that the company has issued "hundreds of thousands" of warnings to customers but has terminated service on less than one tenth of 1 percent.

There's data to support the claim that warning notices work. In the United Kingdom, research done by Wiggin and Entertainment Media Research found that seven out of 10 people surveyed said they would stop downloading unauthorized content if they received a notice from their ISP.

Note to readers: Have you received a warning letter from AT&T or another ISP? If so, e-mail me by clicking on the link in my bio below. Please include your contact information. I won't reveal your name in any story if that's what you prefer.

Research in the United Kingdom shows that 70 percent of those surveyed would stop pirating music if they received a notice from their ISP.

(Credit: Wiggin)